I told Lloyd [Blankfein], ‘You’ve been kicked around more than anyone!' And here I thought I was No. 1.--David Patterson

The truth is, Toronto, the city, is the fourth largest in the majors, after only New York, Los Angeles, and Chicago. More than five million people live in the surrounding area. The ownership — Rogers, an enormous multibillion-dollar communications and media company — has virtually limitless resources, as well as a national sports TV network, a string of radio stations, and a soon-to-be-launched national sports magazine. Rogers Centre — which the company bought for the bargain price of $25 million in 2004 — isn't a beautiful ballpark, but it's clean and safe and accessible. Even the Canadian dollar, which was once the ready excuse for every struggling sports franchise up here, has eclipsed its American cousin. The Jays can knock off three percent from every contract, right off the top. But there they were last night against the Pirates, playing in a stadium not even one-third full, 23rd in payroll, and still struggling to reach the .500 mark, let alone thinking about making a run at the post-season.--Chris Jones

... on Opening Night against the Celtics last October, the Cavaliers embraced their LeBron-less plight. Their video ended with Mo Williams screaming incoherently and turning into a fireball. The subtext? This is our best player. It's Mo Williams. We just wanted to prepare you guys now.1 In Hollywood, that Mo Williams dilemma hangs over everything. They make too many movies and don't have nearly enough stars. That's a problem. Their solution is to "create" stars, leading to a bigger problem: They're effectively forcing actors like Chris Evans and Ryan Reynolds down our throats like big clumps of broccoli. Why not worry about finding quality scripts and making quality movies instead? That would require real work and real ingenuity. It's much easier to make superhero movies, sequels, anything with aliens, anything with the world about to blow up, and anything that could carry "3D" in the title. That's how we arrived to a point in which the following two facts are indisputable.

Fact: People believe Will Smith is the world's biggest movie star (even though he doesn't make great movies).
Fact: People believe Ryan Reynolds is a movie star (even though he isn't).

If stimulus were to sharply boost aggregate demand it is quite likely that Congress would return the UI limit to 26 weeks, as it has during previous recoveries. For similar reasons, the real minimum wage would decline with more rapid growth in demand. Aggregate supply and demand are hopelessly entangled, a problem that many economists haven’t fully recognized. Economists aren’t even close to being able to identify the level of structural unemployment in real time. And even if we could, the Lucas Critique suggests that it is not a policy-invariant parameter. If we learned anything from the experience of the 1970s, it is that we should not base monetary policy on estimates of the level of structural and cyclical unemployment. Instead, policymakers should focus on a nominal target, such as the price level. In my view nominal GDP targeting would be better than a pure inflation target, as it would better accommodate supply shocks, and more closely correspond to the “dual mandate” of monetary policymakers in countries such as the US. By that criterion, monetary policy in the US, Europe, and Japan has been far too contractionary since late 2008.--Scott Sumner

[President Obama] is arguing we should spend to reduce our debt because of effects on future growth rates. This is all from the magic of the multiplier, where investments that would be wasteful in the private sector have a positive NPV in the public sector. This makes sense to most modern macroeconomists and they provide the intellectual cover for those who don't understand it but want it to be true. Economists have changed Adam Smith's dictum 'what is prudence in the conduct of every private family, can scarce be folly in that of a great kingdom' to 'what is foolish for a family is wise for our government.' I regret wasting time learning the formal casuistry that rationalizes the pedestrian and perennial desire to increase redistribution and federal power under the pretext of increasing growth. I know it's a defensible statement, not logically impossible just contingent on some heroic assumptions, but when you look at how our money is actually spent, empirically absurd: defense spending, K-12 education, ethanol, light rail, Medicare, all boondoggles that have made things worse via their top down direction. Meanwhile, Japan cleans up its disasters much more efficiently than the US would have (see Katrina), and where in 1931 the US could build the Empire State Building in 400 days, the World Trade Center is at 10 years and counting. At this rate we are declining much faster than when Egypt built the monumental pyramids at Giza around 2600 BC, then the pathetic Unas 300 years later (my grandkids will probably think the Hoover dam was made by alien astronauts).--Eric Falkenstein

Ah, beer. The cause of and the solution to all of life's problems.--Homer Simpson

When I’m writing on a whiteboard, if I find myself stuck in the middle of a word I can’t spell, I just abbreviate the word wherever I am.--Jon Acuff

... while Too Big to Fail rounds off some corners, the movie gets the basic story right: the crisis resulted from serious mistakes made by many people, especially on Wall Street and in government. But these people are not portrayed as evil; they just made mistakes. Even Lehman CEO Richard Fuld, who comes off poorly in the movie for scaring away potential investors, is shown making mistakes because he so badly wants to save his firm. He did the wrong thing for the right reasons. In contrast, Inside Job is all about assigning blame. The documentary makes a moralistic case that the crisis was all the fault of Wall Street villains and their helpers. To be sure, mistakes can cross over into villainy - some creators of toxic securities must have known that they were not doing God's work. But Inside Job takes this to a populist extreme, assuming malevolent motivations and spattering blame through ambush interviews of hapless crisis participants who agreed to speak on camera (I took a pass when the filmmakers called me in the spring of 2009). The portrayal of Eliot Spitzer is especially ironic, with the former New York Governor shown as a saint commenting on all the sinners. In truth, the striking feature of the crisis was how many different people committed mistakes: banks and other firms made bad loans and packaged them into subprime securities; rating agencies rubber stamped them as AAA; pension funds bought the junk assets; government officials missed the mounting problems; and so on. But surely also at fault are the multitude of individual homebuyers who turned into mini-speculators during the housing bubble. These folks are off the hook in Inside Job.--Phillip Swagel

The Obama Administration is now demanding that [James] Risen reveal his source for a 2006 scoop about CIA missteps in Iran. If he refuses to cooperate, which is his plan, he faces the possibility of jail time. Somewhere, Dick Cheney is smiling.--Conor Friedersdorf

What Obama should do is the exact opposite of this sensible advice: he should make preparations to shut down the machines that write Social Security checks and army paychecks, lamenting that he has no choice because the US is contractually obligated to pay its other bills. The GOP is betting that Democrats will take the blame for this. I think that is a very bad bet. This is why schools and other government agencies facing budget cuts tend to immediately slash something high-profile and politically popular. That's how you get them to reverse the budget cuts. I'm sure most of us in the private sector can recount situations where this has worked in corporations as well.--Megan McArdle

It has been the greatest honor of my life to serve and to lead you for the past four and a half years. All of that time we have been engaged in two wars and countless other operations. It has been a difficult time for you and for your families, from long and repeated deployments for those in all four services -- and the associated long separations from loved ones -- to the anguish of those of you who have lost friends and family in combat or those of you who have suffered visible and invisible wounds of war yourselves. But your dedication, courage and skill have kept America safe even while bringing the war in Iraq to a successful conclusion and, I believe, at last turning the tide in Afghanistan. Your countrymen owe you their freedom and their security. They sleep safely at night and pursue their dreams during the day because you stand the watch and protect them. For four and a half years, I have signed the orders deploying you, all too often into harm's way. This has weighed on me every day. I have known about and felt your hardship, your difficulties, your sacrifice more than you can possibly imagine. I have felt personally responsible for each of you, and so I have tried to do all I could to provide whatever was needed so you could complete your missions successfully and come home safely -- and, if hurt, get the fastest and best care in the world. You are the best that America has to offer. My admiration and affection for you is without limit, and I will think about you and your families and pray for you every day for the rest of my life. God bless you.--Robert Gates

have 2.7 times higher chance of dying in infancy
consume 90.43% less oil
make 85.78% less money
use 79.3% less electricity
have 53.76% more chance at being employed
spend 96.79% less money on health care
die 3.73 years sooner
have 12% less babies
be 83.33% less likely to have HIV/AIDS
experience 7.78% less of a class divide

- The home will double as a place of employment, with men and women conducting much of their work at the computer terminal. This will affect both the architecture and location of the home. It will also blur the distinction between places of residence and places of business, with uncertain effects on zoning, travel patterns and neighborhoods.
- There will be a shift away from conventional workplace and school socialization. Friends, peer groups and alliances will be determined electronically, creating classes of people based on interests and skills rather than age and social class.

My guess is that if you add up the cost of doing all of the studies in the education/earnings literature, it is far more than the cost would have been of undertaking a college scholarship lottery among a sample of students and observing the differences in outcomes. To study the relevant margin, choose the sample of students from those whose grades and SAT scores would barely gain them admission to second-tier state schools. Randomly give half of them full-ride scholarships and give half of them nothing. Observe their years of schooling and their subsequent earnings. Base your conclusion on those results.

Glad to hear you are learning on how to handle your finances better. Here are a few other tips:

1. You can sustainably draw 4% per year against your liquid investments, for the rest of your life. Any dollar that you don't spend in the year you make it can go into liquid investments, like a low cost index fund or low-risk savings. For an NFL player who is able to save $5 million, this will be $200,000 per year in spend. Sure beats the 80% of NFL players who end up filing for bankruptcy.

2. You can employ the same strategy as Fischer Black, who is probably the last generation's financial genius. After all of his many notable achievements, with his own money he simply put half of his money in a stock fund, half of it in low risk savings, and rebalanced it back to 50-50 once per year. This approach took very little time, exhibited low volatility, and forced him to buy stocks low and sell them high. You can do this yourself without paying an investment advisor. You might perform better than 99% of everybody else with this approach.

3. New cars and other highly depreciating assets are a good way to burn through your money. Keep that spending to a minimum. Buying a home (hard asset) for your parents is a much harder way to lose. I've taught this course at my church; might be worth going through at some point. Good advice on spending well.

... the Supreme Court has agreed to review United States v. Jones, the DC Circuit’s “mosaic theory” case on whether and when use of a GPS device installed on a car is a Fourth Amendment search.--Orin Kerr

Even in a crowd of rising food and commodity costs, corn stands out, its price having doubled in less than a year to a record $7.87 per bushel in early June. Booming global demand has overtaken stagnant supply. But rather than ameliorate the problem, the government has exacerbated it, reducing food supply to a hungry world. Thanks to Washington, 4 of every 10 ears of corn grown in America — the source of 40 percent of the world’s production — are shunted into ethanol, a gasoline substitute that imperceptibly nicks our energy problem. Larded onto that are $11 billion a year of government subsidies to the corn complex. ... Because of the subsidy, ethanol became cheaper than gasoline, and so we sent 397 million gallons of ethanol overseas last year. America is simultaneously importing costly foreign oil and subsidizing the export of its equivalent.
That’s not all. Ethanol packs less punch than gasoline and uses considerable energy in its production process. All told, each gallon of gasoline that is displaced costs the Treasury $1.78 in subsidies and lost tax revenue.--Steven Rattner

After earning my PhD, in chemistry, I worked in drug-discovery research for more than 20 years. Aside from being a fascinating profession, it was pretty secure -- until the last decade. Then it became anything but. Why the change? Well, it costs about $1 billion to bring a new drug to market. Blockbuster drugs that bring in multiple billions in profits, such as Lipitor, are needed to support the R&D costs of all other drugs -- ones that don't pan out, and ones that just can't help enough people to justify the investment before the patent expires. And the patents of almost all current blockbusters are expiring about now, cutting drug companies' revenues drastically. Adding to the problem is the Food and Drug Administration, which has become overly restrictive and risk-averse, has made it very difficult (and even more expensive) for companies to bring replacement drugs to market. To trim expenses, companies began to outsource research to India and China. It started as a trickle, but soon became a tsunami, leaving many thousands of highly intelligent and well-trained professionals with nothing to do -- a shameful waste of talent.--Josh Bloom

Combined with central government debt and other liabilities such as bad bank loans, analysts estimate China’s overall explicit debt load is about 70 per cent of gross domestic product. But some analysts believe the contingent liabilities of the government are much higher, once debts on the books of state-owned enterprises and other entities implicitly backed by the state are included. “If you take a very broad view of the Chinese government’s contingent liabilities rather than explicit debt on the books then the number comes to well over 150 per cent of China’s GDP in 2010,” according to Victor Shih, a political economist at Northwestern University in the US. The US has a debt-to-GDP ratio of 93 per cent, while Japan’s ratio is over 225 per cent.--Simon Rabinovitch and Jamil Anderlini

... I do not believe that China’s high savings and low consumption rates are a function of any remarkable preference on the part of Chinese households for savings over consumption. They are simply the automatic consequence of a system in which increases in GDP growth are subsidized by transfers from the household sector, which effectively constrains the relative growth of household income and, with it, household consumption. In that case the only way for China to rebalance would be for Chinese household income to grow faster than GDP. This requires three things above all. It requires that wages grow faster than productivity, that the currency appreciates, and that real interest rates rise. This does not seem to be happening in China, as I discussed in a blog entry last month. Wages have been rising quickly in the past year, but the currency is barely appreciating in real terms against the dollar (and is probably depreciating on a trade weighted basis), and of course real interest rates are declining sharply.--Michael Pettis

In Does Education Matter?, [Alison] Wolf illustrates the absurdity of the increase-the-graduates/increase-the-growth logic by reference to the high remuneration of lawyers. That is, given lawyers’ high wages, having more lawyers would surely mean that there are more and more people earning more and more dough, and therefore in total, society is becoming more and more wealthy. ‘[This] would suggest’, she writes, ‘that the fastest way to boost growth would be to send everyone to law school’. Which is clearly ridiculous. In fact, what the high remuneration of lawyers tells us is that we live in a highly regulated society – as opposed to a productive one – which consequently values lawyers. It doesn’t mean that churning out an ever-increasing number of law graduates is the elixir of economic growth. Likewise, Wolf writes, ‘it is no more self-evident that since some education makes some of us richer, more would make more of us richer, than it is that “two aspirin are good” means “five aspirin are better”’. The wrongheaded belief that you can generate growth simply by increasing the number of graduates has led to the effacement of the structural problems of the economy. In other words, seeking the wrong answers has generated the wrong questions. For example, ‘there tends to be an obsession with how many engineers the UK produces, when the real question ought to be why haven’t we got more engineering industry?’, says Wolf. You don’t have to be a fully signed up economic determinist to recognise that our economic travails cannot be solved through education, education, education.--Tim Black

Al Gore’s lifestyle is a test case for the credibility of his gospel — and it fails. The tolerance of Al Gore’s lifestyle by the environmental leadership is a further test — and that test, too, the greens fail. The average citizen is all too likely to conclude that if Mr. Gore can keep his lifestyle, the average American family can keep its SUV and incandescent bulbs. If Gore can take a charter flight, I don’t have to take the bus. If Gore can have many mansions, I can use the old fashioned kind of shower heads that actually clean and toilets that actually flush. Al Gore looks to the average American the way American greens look to poor people in the third world: hypocritically demanding that others accept permanently lower standards of living than those the activists propose for themselves. ... The Vice President thinks he can square this circle, but he can’t. Sometimes the truth is inconvenient. Mr. Gore must find either a new cause or a new way to live. ... I don’t judge, dear reader, and neither should you. May we all find mercy when we stand alone, naked and ashamed before the judgement seat of God. ... If Al Gore really wants to understand why the global green movement has tanked, he should start by taking a long hard look in the mirror. Gaia, too, can be betrayed by a kiss.--Walter Russell Mead

Gore’s failures are not just about leadership. The strategic vision he crafted for the global green movement has comprehensively failed. That is no accident; the entire green policy vision was so poorly conceived, so carelessly constructed, so unbalanced and so rife with contradictions that it could only thrive among activists and enthusiasts. Once the political power of the climate movement, aided by an indulgent and largely unquestioning press, had pushed the climate agenda into the realm of serious politics, failure was inevitable. ... Like war, global warming may well be real — but that doesn’t mean a treaty can help. The green movement’s core tactic is not to “hide the decline” or otherwise to cook the books of science. Its core tactic to cloak a comically absurd, impossibly complex and obviously impractical political program in the authority of science. Let anyone attack the cretinous and rickety construct of policies, trade-offs, offsets and bribes by which the greens plan to govern the world economy in the twenty first century, and they attack you as an anti-science bigot.--Walter Russell Mead

Today, heterosexual marriage is frequently depicted as a site for domestic violence and child abuse. A review of academic literature on the subject would indicate a preoccupation with the damaging consequences of heterosexual marriage. Terms such as the ‘dark side of the family’ invoke a sense of dread about an institution where dominating men allegedly brutalise their partners and their children. This preoccupation of professional victimologists is reflected in popular culture. Cinema and television constantly give us stereotypical stories about unhappy, failed and dysfunctional heterosexual marriages. In contrast, same-sex unions are treated with reverence in popular culture, depicted as mature relationships between loving equals. Of course, heterosexual couples continue to get married, but there has been no time in history when the institution of heterosexual marriage has enjoyed such feeble affirmation. Indeed, these days heterosexual couples are often likely to hear the refrain ‘Why get married?’ or ‘Why wait for marriage before having children?’. Paradoxically, in some quarters the idea that marriage for heterosexuals is no big deal coincides with the cultural sacralising of same-sex unions. It is difficult to avoid the conclusion that behind the gay-marriage discussion there lurk some profound questions about how to endow intimate relationships with meaning today. And in such circumstances, elite-sanctioned snobbish intolerance is really no more acceptable than anti-gay prejudice.--Frank Furedi

We told him that, but his staff are complaining that suddenly the Essex Community Business association thinks it’s running the taverna. They’ve been protesting, stealing stock and frightening away the customers. It’s crazy.

Tim Harford, master of the modern parable. Or allegory. Or Greek dialogue.

What do I know, I was busy doing math on computers in engineering school.

Monday, June 27, 2011

The story of how same-sex marriage became legal in New York is about shifting public sentiment and individual lawmakers moved by emotional appeals from gay couples who wish to be wed. But, behind the scenes, it was really about a Republican Party reckoning with a profoundly changing power dynamic, where Wall Street donors and gay-rights advocates demonstrated more might and muscle than a Roman Catholic hierarchy and an ineffective opposition.--MICHAEL BARBARO

Tracy Morgan recently got in trouble for saying in his act that if his son announced he was gay, Tracy would stab him. If we presume that this was one of fifty outrageously inappropriate things Tracy said on stage that night, all within character as the absurdly ignorant and selfish guy he likes to portray for laughs, it means a comedian was trying to be outrageous and funny and missed the mark. That's all it means, since no reasonable person believes Tracy would stab his own son or love him less if he came out. But reported out of context, as it was, one has trouble seeing the statement as anything but the worst kind of hate speech. I would argue that Tracy was 100% responsible for whatever psychological or social harm he caused to the audience that heard his remark live, and zero percent responsible for the harm that was caused when others spread the story. The spreaders became the authors (as far as responsibility) when they changed the context. They became the Authors by Relocation, a term I just made up.--Scott Adams

The spread of sex-selective abortion is often framed as a simple case of modern science being abused by patriarchal, misogynistic cultures. Patriarchy is certainly part of the story, but as [Mara] Hvistendahl points out, the reality is more complicated — and more depressing. Thus far, female empowerment often seems to have led to more sex selection, not less. In many communities, she writes, “women use their increased autonomy to select for sons,” because male offspring bring higher social status. In countries like India, sex selection began in “the urban, well-educated stratum of society,” before spreading down the income ladder. Moreover, Western governments and philanthropic institutions have their fingerprints all over the story of the world’s missing women. ... The American establishment helped create the problem, but now it’s metastasizing on its own: the population-control movement is a shadow of its former self, yet sex selection has spread inexorably with access to abortion, and sex ratios are out of balance from Central Asia to the Balkans to Asian-American communities in the United States. This places many Western liberals, Hvistendahl included, in a distinctly uncomfortable position. Their own premises insist that the unborn aren’t human beings yet, and that the right to an abortion is nearly absolute. A self-proclaimed agnostic about when life begins, Hvistendahl insists that she hasn’t written “a book about death and killing.” But this leaves her struggling to define a victim for the crime that she’s uncovered. ... the sense of outrage that pervades her story seems to have been inspired by the missing girls themselves, not the consequences of their absence. Here the anti-abortion side has it easier. We can say outright what’s implied on every page of “Unnatural Selection,” even if the author can’t quite bring herself around. The tragedy of the world’s 160 million missing girls isn’t that they’re “missing.” The tragedy is that they’re dead.--Ross Douthat

Bon Temps is a world where it doesn't matter whom you love or how. A fantasy world that we are getting closer to all the time.--Molly Lambert

The process of selecting and securing a partner, whether for conceiving and rearing children, or for enhancing one’s socioeconomic standing, or for attempting motel-room acrobatics, or merely for finding companionship in a cold and lonely universe, is as consequential as it can be inefficient or irresolute. Lives hang in the balance, and yet we have typically relied for our choices on happenstance—offhand referrals, late nights at the office, or the dream of meeting cute. ... Men want someone who will take care of them, make them look good, and have sex with them—not necessarily in that order. It may be that this is all that women really want, too, but they are better at disguising or obscuring it. They deal in calculus, while men, for the most part, traffic in simple sums. A common observation, about both the Internet dating world and the world at large, is that there is an apparent surplus of available women, especially in their thirties and beyond, and a shortage of recommendable men. The explanation for this asymmetry, which isn’t exactly news, is that men can and usually do pursue younger women, and that often the men who are single are exactly the ones who prefer them. For women surveying a landscape of banished husbands or perpetual boys, the biological rationale offers little solace. Neither does the Internet. ... One woman who has dated fifty-eight men since her divorce, a few years ago, told me that she maintains a chart, both to keep the men straight and to try to discern patterns—as though there might be a unified-field theory of why men are dogs. ... men exaggerate their income (by twenty per cent) and their height (by two inches), perhaps intuiting that women pay closer attention to these data points than to any others. But women lie about these things, too. A date is an exercise in adjustment.--Nick Paumgarten

There is a fundamental imbalance in the social dynamic. The most valuable asset is attractive females. As soon as you get them, you get loads of creepy guys.--Harj Taggar

Our social and sexual patterns have changed more in the last fifty years than in the last ten thousand. Our courtship rituals are rapidly changing, and we don’t know what to do.--Helen Fisher

Don't expect to buy the bottom - expect the market to torture you with some pain, and prepare yourself to deal with it - that way you won't find yourself unprepared and regret it.--Josh Brown's colleague

In raw numbers, New York has the greatest legal surplus by far. In 2009, 9,787 people passed the bar exam in the Empire State. The analysts estimated, though, that New York would need only 2,100 new lawyers each year through 2015. That means that if New York keeps minting new lawyers apace, it will continue having an annual surplus of 7,687 lawyers.--CATHERINE RAMPELL

Some observers are calling for a “repatriation holiday” on profits held by foreign subsidiaries. Some members of Congress, eager to stimulate our fragile economy, are listening. They shouldn’t. A tax holiday on repatriated funds is a proven failure — expensive in both direct and indirect ways. It was already tried in 2004 and didn’t work.--WILLIAM GALE & BENJAMIN H. HARRIS

On economic growth, real GDP has risen 0.8% over the 13 quarters since the recession began, compared to an average increase of 9.9% in past recoveries. From the beginning of the recession to April 2011, real personal income has grown just .9% compared to 9.4% for the same period in previous post 1960 recessions. The standard response from Obama apologists is that recession of 2008 and 2009 was different because, as former Clinton administration economist Robert Shapiro puts it, "this was a financial crisis, and these take longer to recover from." In fact, in most cases, the deeper the recession, the stronger the recovery to make up for lost ground. That was what Ronald Reagan's critics said when the U.S. economy soared during 1983 and 1984 with quarterly growth numbers exceeding 7%. At the time, liberal Keynesians yawned and declared the good times nothing more than a normal snapback from the deep recession.--Stephen Moore

The southern San Andreas fault has not experienced a large earthquake for approximately 300 years, yet the previous five earthquakes occurred at ~180-year intervals. ... We conclude that rupture of the stepover faults, caused by periodic flooding of the palaeo-Salton Sea and by tectonic forcing, had the potential to trigger earthquake rupture on the southern San Andreas fault. Extensional stepover zones are highly susceptible to rapid stress loading and thus the Salton Sea may be a nucleation point for large ruptures on the southern San Andreas fault.--Daniel Brothers, Debi Kilb, Karen Luttrell, Neal Driscoll & Graham Kent

Friday, June 24, 2011

Apple makes more money from the sale of one Mac than HP does from selling seven PCs.--Matt Richman

Nothing contradicts [Keynesians'] dogma more conclusively than former President Clinton's massive fiscal squeeze. When President Clinton took office in 1993, government expenditures were 22.1% of GDP, and when he departed in 2000, the federal government's share of the economy had been squeezed to a low of 18.2%. . . . And that's not all. During the final three years of the former President's second term, the federal government was generating fiscal surpluses. President Clinton was even confident enough to boldly claim in his January 1996 State of the Union address that "the era of big government is over." President Clinton's squeeze didn't throw the economy into a slump, as Keynesianism would imply. No. President Clinton's Victorian fiscal virtues generated a significant confidence shock, and the economy boomed.--Steve Hanke

I've spent the first half of my life being underestimated. It used to bother me, now I use it to my advantage - they never see me coming. And god help the poor soul who ever tells me that I can't do something. Oh PLEASE tell me that so I can watch the horror and panic on your face when I come out of nowhere and do it better than you. I've also spent the first half of my life rebelling. There are rules that were made to keep order and protect people, these are the rules I respect as a citizen and a family man. But then there are rules that have outlived their usefulness or only exist to protect someone else's entrenched interest or personal fiefdom. These make me want to smash my guitar and kick an amp off the stage.--Joshua Brown

Thursday, June 23, 2011

They’re going to get it done. My over-under is July 10. They get it done by July 15-17, they won’t lose any preseason games, which is really the goal here. I think they’re going to make progress and get it done by the middle of July. ... That’s about $700 million if they don’t play preseason games that comes off the table, not only that they owners don’t earn but the players don’t get a cut of. So if you’re talking about a specific cap number for players’ salaries only in 2011 of maybe about $118 million per team of which every team would have to spend a floor of 90 percent of that, you start taking $700 million out of there and all of a sudden, then that’s maybe $10 million less per team because they don’t have that money. That’s something both sides are cognizant of. ... If this deal goes too far into the preseason, I can tell you for a fact right now that there are going to be some major corporate advertisers, beer advertisers, car advertisers, who say, ‘You know what, thanks but we’re going to take all of our September advertising and we’re going to ESPN and we’re going to college football. Or we’re going to take some segment of it now and we’re going to make our decision. You can’t make your decision. We need to make ours.'

I finally watched “Inside Job” this weekend. It was an excellent documentary for people who don’t want to understand the financial crisis but want to believe they would’ve seen it coming. Watching it, you’d think that the only people who missed the meltdown were corrupt fools, and the way to spot the next one is to have fewer corrupt fools. But that’s not true. Worse, it’s dangerously untrue. In telling the wrong story about how the financial crisis happened, it misinforms about how to keep it from happening again. ... it is clear that our key systems are going to continue growing more complex, and we’re not getting any smarter, or any less able to ignore risks that we know we should be preparing for. “Inside Job” may have missed that story, but the rest of us can’t afford to.--Ezra Klein

Apparently soaps and reality shows attract similar viewers—they appear to be substitutes for the average consumer. As with any new product that is hot, its substitutes suffer when it enters the market. As the World Turns and Guiding Light have given way to such pathetic substitutes as The Apprentice and Let’s Make a Deal.--Daniel Hamermesh

By increasing the demand for lower-wage non-unionized workers while decreasing the demand for higher-wage unionized workers, the difference between the annual incomes of each of these groups of workers shrinks. Incomes in America thereby become less ‘unequal.’--Don Boudreaux

The way I see it, the main difference between a business entrepreneurship and policy entrepreneurship is that if things do not work out as planned, the policy entrepreneur is insulated from the adverse consequences. For me, that difference does not work in favor policy entrepreneurship.--Arnold Kling

During the Bush presidency, which ended on Jan. 20, 2009 with the inauguration of President Obama, U.S. troops were present in Afghanistan for 87.4 months and suffered 570 casualties—a rate of 6.5 deaths per month. During the Obama presidency, through today, U.S. troops have been present in Afghanistan for 29.1 months and have suffered 970 casualties—a rate of 33.3 deaths per month.--Edwin Mora

Wednesday, June 22, 2011

by their economic growth forecast. More tellingly, the red dots showing the Fed forecasts are all close to the bottom of the data cloud, which means that it will be quite unusual to see the labor market perform so well, given their projections for only moderate economic growth.--Justin Wolfers

... it would seem that Our Lord finds our desires, not too strong, but too weak. We are half-hearted creatures, fooling about with drink and sex and ambition when infinite joy is offered us, like an ignorant child who wants to go on making mud pies in a slum because he cannot imagine what is meant by the offer of a holiday at the sea. We are far too easily pleased.--C.S. Lewis

The New Republic's Jonathan Chait is unimpressed by my "rebuttal" to Stephen Metcalf's Slate essay about libertarians and the philosopher Robert Nozick. This is probably due to the fact that I didn't write one. However, others have, and I want to make sure Chait has sufficient reading material before his next squash game with Jacob Weisberg.--Matt Welch

I fear it represents a great deal of confirmation bias on the left. A lot of liberals who see all libertarians as less-lovable Ron Swansons nod along with Metcalf as he makes one clichéd assertion after another and the end result is a bunch of readers happily cheering a piece that makes no attempt at all to treat its subject with any sort of seriousness or grace. It affirms deeply held opinions and distrust, and helps cement the language barrier between liberals and libertarians in ultimately a very destructive and unfortunate way.--E.D. Kain

What strikes me about Paul [Krugman]'s blog post, however, is how completely unconvincing it is. He uses a chart that starts the Reagan era in 1979, arguing we need to correct for the business cycle. But would or should this persuade anyone? The null hypothesis being tested is that Reagan policies had a significant effect on revenue growth. But would any believer in that null hypothesis include the last couple years of the Carter administration as part of the Reagan era? Weren't the policies of those years precisely what Reagan was trying to reverse? Maybe Paul's chart might appeal to someone who already agrees with him, but I thought economists turned to data to try to persuade those who are truly undecided. It is hard to see how this presentation of the data would move someone who is yet to make up his mind. One more thing: What Paul calls "the Clinton miracle" might also be called "the Internet bubble."--Greg Mankiw

Magnetar would put down a few million bucks to start a collateralized-debt obligation (CDO), cram it full of the junkiest mortgage bonds it could find, then get a bank like JPMorgan to sell it off to investors as a triple-A, gold-plated piece of the booming housing market; when in reality it was a time bomb filled with toxic waste. Whatever Magnetar lost when the thing went bust, it more than made up by taking out massive short positions against it. For a real world corollary, consider this akin to building a crappy house, selling it to someone, and then taking out an insurance policy so that when it falls down or catches fire, you get paid big bucks.--Matthew Philips

$25 billion a year isn't bad, especially when you consider that the expenses of the supplement companies are just a tiny bit lower than those of the drug companies. Not having to do any preclinical research at all helps, of course, and not having to run any clinical trials at all (nothing for efficacy, nothing for safety) helps, and not having to be reviewed by the FDA helps, too. And then on the other side of the ledger, being able to say any damn thing that comes into your head helps the most of all. And as you'll see from that article, not only has Senator Hatch himself benefited greatly from his nutritional ties, but so has his family, immediate and extended. And his friends, and his former business partners - pretty much everyone within range, it seems. Each sides regards the other as the gift that keeps on giving. And why shouldn't they?--Derek Lowe

Complacency is baked into our species. We can’t resist thinking that recent experience defines the future. Give us a run of good luck, and we are apt to turn that into an implicit expectation that our luck will continue -- even that we are entitled to it. This kind of thinking was instrumental in the run-up to the financial crash of 2008. Too many private and public institutions assumed that an extraordinary run in prosperity, particularly in the real estate market, was just normal. It didn’t occur to them that things could go so wrong. Even when token stress testing or risk assessment was done, it largely excluded the possibility of a bad shock or a protracted slump. Risk wasn’t systematically measured; it was ignored. It’s easy to write this off to greed or foolishness on the part of Wall Street. But the truth is, our entire civilization rests on a foundation just as shaky. We assume that the very Earth is static and will always be as it is now, or as we remember it. Yet geophysics tells us that is emphatically not the case. Bad things happen. ... natural disasters are almost always compounded by human error. The buildings in Port-au-Prince, Haiti’s capital, were poorly constructed. That most of them would collapse in a severe earthquake, leading to enormous loss of life, was easily predictable. Worsening the situation, United Nations aid officials staffed the relief effort with personnel from Nepal, where there was an ongoing cholera epidemic. Unsurprisingly, those workers brought the disease with them, and so began an outbreak that is thought to have so far killed at least 4,700 Haitians. It’s easy to dismiss this kind of poor response when it occurs in Haiti, which has an infamously ineffective government. But a mortifying degree of incompetence was also on display after Hurricane Katrina struck New Orleans in 2005, and again this year when the Japanese tsunami swamped four reactors at the Fukushima Dai-Ichi nuclear-power plant. --Nathan Myrvhold

It goes without saying that economists--especially macroeconomists--have a poor track record on big historical trends (eg, most economists in the 1950s believed that socialism was more productive yet less polluting than capitalism, that a permanent trade-off between inflation and unemployment existed, that the third world would grow dramatically after colonialism, that dynamic programming would be useful for fiscal policy, or more recently, that requiring 20% down payment to get a home mortgage was merely a pretext for racism and should be abolished, to name but a few). Too many believe in the naive Marxist fantasy about a life of dilettantish activities unrelated to economic scarcity. How many times are programs justified by the fact that 'The US is the richest country in the world' or some corporation has billion of dollars, as if that capital was sitting there, unused and probably stolen. Bankruptcy will make us a better society because currently many people think that solutions are as simple as creating a mountain of debt (Bill Gross estimates it at 500% our GDP) to create make-work or new economic rights, and those sinecures don't create what Arthur Brooks calls perceived earned success, the satisfaction that comes from work that is appreciated both by your boss, who compares your cost to alternatives, and your customers, who compare your value to alternatives. There are no shortcuts to the rewards of the virtuous life, as a person or a society.--Eric Falkenstein

The failure of Western experts to anticipate the Soviet Union's collapse may in part be attributed to a sort of historical revisionism -- call it anti-anti-communism -- that tended to exaggerate the Soviet regime's stability and legitimacy. Yet others who could hardly be considered soft on communism were just as puzzled by its demise.--Leon Aron

I pray that Allah destroys America and all its allies. And the day that happens, and I assure you it will and sooner than you think, I will be very pleased.--American-born cleric Anwar al-Awlaki

Vodka's a joke. I don't listen to the Black Eyed Peas. I don't watch reality television. I don't drink vodka. I make those decisions for the same reason. It's filler. There's no substance to any of that stuff. It's designed to smell and taste like nothing.--Adam Stemmler

Among 50-year-old men, for example, those in the highest education group are now projected to live almost six years longer on average than those in the lowest education group -- and this differential has been rising sharply. The widening gap in life expectancy is also evident geographically. In 2007, men living in the American counties with the greatest average longevity could expect to live more than 15 years longer than men in the lowest- ranked ones. In 1987, that gap was less than 12 years. Sadly, life expectancy in some counties actually declined over that period. The leading explanations for this involve health behavior -- including diet, exercise and smoking. For example, men 50 and older without a high-school education are more than twice as likely to smoke as those with a college degree. Exercise behavior also varies substantially. Among 45- to 54-year-olds in one study, only 16 percent of those without a high-school degree exercised vigorously at least once a week, whereas 56 percent of college graduates did.--Peter Orszag

This month marks the two-year anniversary of the end of recession and start of recovery. But it’s a recovery in name only, so weak as to be nonexistent. And it has been weak from the start. Real GDP growth has averaged only 2.8 percent per year compared with 7 percent after last deep recession in 1981-82 ...--John Taylor

If the US is able to build the healthiest financial sector in the world, certainly other countries will want to imitate it. If some prefer to redistribute the risks to their own taxpayers, and their taxpayers are willing to bear this cost, so much the worse for them. All this emphasis on international coordination of policy is unnecessary. And it’s good to see so many disparate voices once again adopting the Reaganite stance of hanging out a beacon to the world.--John Carney

[Tim] Thomas became the face of the playoffs — his pugnacity, flexibility, and pure skill were exhilarating. He became the beard of playoffs, too. And there was exhilaration in that. If you came to see him as a bear, he was also a paragon of what else a bear could be, a tough, tender vision of love — him loving you, you loving him, him protecting you. Of course, he’s the goalie. You can always sense warmth in Thomas' beady eyes — not lust or desire, nothing deviant or super freaky, just pure love. He’s the bear that Timothy Treadwell expected to find in "Grizzly Man." He’s the aberrant bear you bring home from Castro Street to mother. Even in the finals after he’d just laid out a Canuck, he radiated more affection than brutishness or anger. He’ll deck you, but he’ll also water your plants.--Wesley Morris

The effort to understand the universe is one of the very few things that lifts
human life a little above the level of farce, and gives it some of the
grace of tragedy.--Steven Weinberg

The quality of mercy is not strain’d,
It droppeth as the gentle rain from heaven
Upon the place beneath: It is twice blest;
It blesseth him that gives and him that takes ...--William Shakespeare

Tuesday, June 21, 2011

... for a quarter century before heading up State-L, [Harold] Koh was the leading and most vocal academic critic of presidential unilateralism in war, and a tireless advocate for institutional cooperation between the political branches in war decisions. I am thus genuinely surprised, as many people are, by his current stance.--Jack Goldsmith

If all art aspires to the condition of music, all the sciences aspire to the condition of mathematics.—-George Santayana

As a Princeton University professor, Ben Bernanke castigated the Bank of Japan in 2000 for a “case of self-induced paralysis” that led to a decade of stagnation. Now, the Federal Reserve chairman may be allowing the U.S. central bank to fall into the same trap after its second round of quantitative easing ends this month. By all but ruling out another cycle of bond purchases, Fed officials have left themselves with little in the way of policy options to respond to slowing growth and rising unemployment. This raises the risk that the U.S. will remain saddled with what Bernanke himself has called a “frustratingly” sluggish recovery that leaves millions of Americans out of work.--Rich Miller

One thing college does do is to keep 25 million students off the unemployment rolls, much like it did for me when I went on my own four year vacation. The world was a different oyster in 1966, however, and it behooves America to recognize the reversal and the necessity for significant changes if it is to compete in the global marketplace of the 21st century. It is becoming obvious that the 2012 election will be fought on a battlefield of job creation. A 9.1% official unemployment rate, and a number nearly double that when discouraged and part-time workers are included in the rolls, portend an angry and disillusioned electorate, which will include millions of jobless college graduates ill-trained to compete in the global marketplace. Over the past 10 years under both Democratic and Republican administrations, only 1.8 million jobs have been created while the available labor force has grown by over 15 million. It is clear, however, that neither party has an awareness of the why or the wherefores of how to put America back to work again.--Bill Gross

The problem is not the curricula—it’s the expectation that college can make all students above average. Overinvestment in college education is not something that can be repaired by tinkering with what college kids are taught. We’re just sending too many students to college at too great an expense. In the present crisis, college education is not the solution; college education is the problem. We need to get college off our backs.--John Carney

If health care becomes an increasing share of the economy, how will we allocate it, and how will we pay for it? That is, if controlling the cost of health care fails, what is Plan B? That is a question that candidates from both political parties agree on as well: they all seem determined to avoid it.--Greg Mankiw

[Megan Fox] was in a different world, on her BlackBerry. You gotta stay focused. And you know, the Hitler thing. Steven [Spielberg] said, “Fire her right now.”--Michael Bay

Put me and five random liberal social science Ph.D.s in a chat room. Let liberal readers ask questions for an hour, then vote on who isn't really a liberal. Then put Krugman and five random libertarian social science Ph.D.s in a chat room. Let libertarian readers ask questions for an hour, then vote on who isn't really a libertarian. Simple as that.

My challenge: Nail down the logistics, and I'll happily bet money that I fool more voters than Krugman. Indeed, I'll happily bet that any libertarian with a Ph.D. from a top-10 social science program can fool more voters than Krugman. We learn his worldview as part of the curriculum. He learns ours in his spare time - if he chooses to spare it.

Farmers have been the wisest investors, especially in the collar counties [of Chicago]. They were smart enough to hang on to their money and reinvest it in the land. It's like any other business. Invest in what you know.--Mark Goodwin

I loathe nothing more than laboring for profane achievements.
Who has ever seen mountains of gold and silver
last through 10,000 generations?--Wang Gonquan

Wife-sale auctions identified “suitors” – men who valued unhappy wives more than their current husbands, who unhappy wives valued more than their current husbands, and who had the property rights required to buy unhappy wives’ right to exit marriage from their husbands. These suitors enabled spouses in inefficient marriages to dissolve their marriages where direct Coasean divorce bargains between them were impossible. Wife sales were an efficiency-enhancing institutional response to the unusual constellation of property rights that Industrial Revolution-era English law created. They made husbands, suitors, and wives better off.--Peter Leeson, Peter Boettke, and Jayme Lemke

The economic structure of the media business is not fundamentally different from that of business in general. The most-prevalent sources of industrial strength are the mutually reinforcing competitive advantages of scale and customer captivity. Content creation simply does not lend itself to either, while aggregation is amenable to both.--Jonathan Knee

... most of [Gary Kasparov's] world-class expertise comes from how he sees and looks at the chess board, not from his calculation ability. The traditional picture of the chess master as a calculating prodigy is bogus.--Sanjoy Mahajan

Try this test: see if you can read [Paul] Krugman's blog and NY Times column for two weeks and not find him, at least once, attributing motives to those economists he disagrees with that you are pretty sure are not their real motives.--David Henderson

So now we have a politician justifying petty corruption by arguing that since every American cop is in fact corrupt, we can’t call it corruption. Fixing tickets isn’t wrong. It’s just a perk that comes with a badge. Unfortunately, this entitlement mindset – the notion that my individual or group interests are special and more deserving than the interests of others – is deeply embedded in our society. Why do so many homeowners who face foreclosure flip out when losing their homes? They’ve convinced themselves that it’s unjust…that they’re somehow entitled to a home they bought with a 2% or 3% downpayment. The entitlement mindset is most destructive when it comes to Medicare and Social Security, the programs that are bankrupting our nation. Unlike fixing traffic tickets, Social Security and Medicare are offered to all Americans of a certain age. And because these entitlement programs are so universal, most Americans think that they must be “fair.” Of course, they’re not “fair.” As currently configured, Medicare and Social Security are transfer payments from younger and future generations of Americans to their elders. Worst of all, the economics of these programs simply don’t work.Too little money going in and too much money going out. Even the AARP has finally figured this out. ... Entitlements corrupt, and Medicare and Social Security corrupt absolutely.--Evan Newmark

Some of the slow-down in the American economy is undoubtedly due to problems in the world economy: the excessive Greece debt and other serious economic problems facing a slowly growing European Community, the nuclear disaster in Japan and the sluggishness of the Japanese economy, and the possible slowing of the rapid growth in both the Chinese and Indian economies. Another part is explained by the policies that slowed the early stages of the recovery, perhaps especially uncertainty about the effects of the financial reform act, and lack of clarity about the cost implications to business of the health care act. I am persuaded that an important third part is due to concerns that the US will be unable to control its fiscal situation. The ratio of federal government spending to GDP grew from about 21% in 2007 to 25% in 2011, a very rapid change compared to the relative stability of this ratio during the prior 25 years. Unfortunately, there is not yet a strong enough will in Congress and by the president to lower this ratio during the coming decade. Indeed, with the looming enormous growth in entitlement spending, especially Medicare, the spending to GDP ratio could well increase sharply in the coming decade, along with the fiscal deficit and the federal debt.--Gary Becker

Nothing in American life today seems as archaic, ubiquitous and immovable as the Republican and Democratic parties. The two 19th-century political groupings divide up the spoils of a combined $6.4 trillion that is extracted each year from taxpayers at the federal, state, county and municipal levels. Though rhetorically and theoretically at odds with one another, the two parties have managed to create a mostly unbroken set of policies and governance structures that benefit well-connected groups at the expense of the individual. Americans have watched, with a growing sense of alarm and alienation, as first a Republican administration and then its Democratic successor have flouted public opinion by bailing out banks, nationalizing the auto industry, expanding war in Central Asia, throwing yet more good money after bad to keep housing prices artificially high, and prosecuting a drug war that no one outside the federal government pretends is comprehensible, let alone winnable.--Nick Gillespie and Matt Welch

If you "screwed up," as in the case of the New York Congressperson Anthony Weiner, you're a dead duck from second one. Nobody but his godfather and mentor Chuck Schumer has ever liked this guy. I'm disappointed to say he is the rep from my old neighborhood, Brighton beach/Coney Island. He is a loudmouth liar who was unable to "hear" the President, Nancy Pelosi, and 433 of his remaining colleagues. He received the support of Charlie Rangel, which, of course, needs to be a vignette in the Tracy Morgan film and tour. Weiner and King James both suffer from ESPN (Extraordinary Sanctimonious Pompous Narcissistic) Syndrome. The halls of Congress are in a way quite similar to an NBA locker room: An outsider can actually feel that everybody else exists to serve the "special people," be they elected or signed via free agency. Once you get there, you ain't leaving so quickly. And, with press people, appointment secretaries, personal assistants, business managers, lawyers, and "Spolestras" to serve your every whim, it's easy to buy into the illusion — there is a monarchy in America.--Dan Klores